Eps 1539: History of cryptocurrency investment

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Carla Fisher

Carla Fisher

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If you are caught up in the recent surge of cryptocurrency or are simply curious how it works, it is important to know about cryptocurrency history, how digital currencies such as bitcoin came to be, and how underlying blockchain technology came into existence. While the creators behind the cryptocurrencys flagship, Bitcoin, are a bit of a mystery, there is plenty that we do know about cryptocurrency history that can inform your decisions around investing and trading cryptocurrency.
While Bitcoin has not gained mass appeal as a currency, it has begun gaining momentum with another narrative: that it is a store of value and hedge against inflation. Bitcoin prices have been a rollercoaster ride since its initial January 2009 debut, but the long-term trajectory has been higher -- up and to the right, as the saying goes. The crypto surged in early 2011, reaching its highest point of $64,000 in mid-April, following an aggressive first quarter.
Bitcoins first price rise came in 2010, when the value of a single bitcoin rose from about $0.0008 to $0.08. In July 2010, bitcoin started trading at $ 0.0008 and rose to $0.08 by month-end. The rise and fall of crypto-exchanges, which controlled substantial bitcoin holdings, also affected the price trajectory of bitcoin.
With media exposure and Bitcoins steep rise, the cryptocurrency industry started taking off. Bitcoin started the crypto age, but it took a good bit before the general public took notice. During the first years of bitcoin, the liquidity was scarce, and the markets for cryptocurrency had few investors.
Others claim Bitcoins popularity skyrocketed because of cryptocurrency exchanges such as Coinbase, which made cryptocurrency trading easier for people with little technical knowledge or experience. In less than a decade, cryptocurrency -- specifically bitcoin -- has seemed like the most fascinating trading opportunity in a very long time. Since the introduction of Bitcoin back in 2009, cryptocurrency has been king.
Over the last couple years, their popularity has only grown, and there are a growing number of people investing in them. Trading, investing, ICOs, startups, countless blogs, YouTube channels, and conferences have turned crypto into a industry unto itself. Since the beginning of Bitcoin, cryptocurrency has been positioning itself as a supranational safe-haven from the local economic volatility and fiat currencies controlled by governments. Bitcoin is widely considered to be the first modern cryptocurrency -- the first public means of exchange that combined decentralized control, anonymity for users, record-keeping through the blockchain, and built-in scarcity.
Functionally, most cryptocurrencies are variations on Bitcoin, the first widely used cryptocurrency. Cryptocurrencies, or virtual currencies, are digital means of exchange created and used by individuals or private groups. Cryptocurrencies are digital assets created using software on computer networks, which allow for safe exchanges and property. Cryptoassets , also known as crypto currency, coins, or tokens, are digital assets that have no physical form.
Crypto-assets were originally developed as a form of digital money that could be used like cash. Cryptocurrency existed as a theoretical construct well before the debut of the first digital alt-currency. Although bitcoin is the first established cryptocurrency, previous attempts to build online currencies with encrypted ledgers existed. As the popularity of Bitcoin began to grow, other currencies were released using the same Blockchain technology.
Re-creation led to a few attempts at cryptocurrency before the current version, built around underlying blockchain technology, took off and went mainstream. The idea of cryptocurrencies began first in the late 1980s, with the idea being a currency that could be sent untraceable and in a way that did not require any central entities (i.e. Cryptocurrency was first mentioned in 1989, a few years later, in 1980, American cryptographer David Chaum invented digital cash, which relied on cryptography for security and verification of transactions. Modern cryptocurrency came into full bloom in 2009, with the publication of a white paper explaining the basics behind the blockchain and Bitcoin.
As Bitcoin gained in popularity, and the idea of a decentralized, encrypted currency gained ground, early alt-currencies emerged. These are sometimes known as altcoins, and they typically attempt to improve upon Bitcoins initial design, offering increased speed, anonymity, or some other benefit. Cryptocurrencies started to grow in popularity in 2008, with the introduction of Bitcoin, which was created by an anonymous programmer or a group of programmers using the name Satoshi Nakamoto. An anonymous programmer or a group of programmers using the name Satoshi Nakamoto.
One of the common ways that cryptocurrency is created is by a process known as mining, which is used by Bitcoin. While early Bitcoin users were able to mine bitcoins using ordinary computers, as the network has grown, the task has become increasingly complex.
What frequently confounds new investors is having currency with a crypto in its name. Some speculators are into cryptos because of their rising value, with little interest in long-term adoption of this currency as a means of moving money.
These investments may too easily draw investments from uninformed plan participants who expect large returns with little appreciation for the risks that investments entail for their retirement investments. Cryptocurrencies are a far cry from typical retirement plan investments, and evaluating cryptocurrencies--and distinguishing the facts from the hype--can be exceptionally challenging, even for experienced investors. Participants are unlikely to be well-informed about these investments, as they are with conventional investments, or have the necessary technical expertise to make an informed investment decision. Investments are always risky, but according to Consumer Reports, cryptocurrency is among the riskiest investment choices.
Digital currencies present unique challenges when compared with traditional currencies such as dollars and euros, which are called fiat currencies within the cryptocurrency community. Let us take a look at the history of how people have made money with cryptocurrency, and some predictions on how it might keep doing so into the future.